Chancellor Rachel Reeves admitted the scale of the costs of the Iran war are not yet known but repeated her vow to ‘provide support for those who need it most’ in the UK
Rachel Reeves has warned “the war in Iran will come at a cost to British families and businesses”. The Chancellor said a two-week US-Iran ceasefire is the “best protection” for household bills but acknowledged that rising prices are already being felt here at home. She admitted the scale of the costs are not yet known but repeated her vow to “provide support for those who need it most”.
Ms Reeves said she will this week set out the “principles” for how the Government will support business in the coming months and the “next phase” of boosting Britain’s competitiveness.
Writing in The Times, Ms Reeves said: “I am going to be straight with people though that the war in Iran will come at a cost to British families and business.
“These are not costs I wanted, but they are costs we will have to respond to. As Chancellor, I have vowed that my economic approach to this crisis will be both responsive to a changing world and responsible in the national interest.
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“We don’t yet know the full scale of those costs, but the immediate priority must be to ensure that the ceasefire holds. “That is the best protection we have against higher costs at home and at the IMF meetings in Washington this week I will be working with allies on the action we can take to guarantee freedom of navigation, including the Strait of Hormuz, to keep energy supplies moving again. “But I know rising prices are being felt now. So, we are taking action to keep costs down for families and provide support for those who need it most.”
Addressing the pressure on businesses, Ms Reeves added: “I know that rising energy bills are not only felt by households. They are felt by business too, including the UK’s manufacturing sector that has faced uncompetitive energy prices for too long.
“So later this week I will be setting out the next phase of our plans to boost Britain’s competitiveness. I will also set out the principles that will guide how we support businesses in the months ahead.”
said that although the scale of the costs were not known, the Government is committed to providing support to those who need it.
Her comments come after Keir Starmer last week admitted he was “fed up” with Donald Trump and Vladimir Putin ’s actions pushing up household bills in the UK. He has told the US President about the need for a “practical plan” to get ships going through the area amid suggestions Iran wants to charge vessels for passage.
The PM has been leading European efforts to try to re-open the Tehran-blockaded Strait of Hormuz, a vital shipping route that transports around a fifth of the world’s oil.
A US-Iran ceasefire attempting to reopen the Strait has faced cracks since being agreed earlier this week. Gas prices have risen sharply during the ongoing closure of the Strait.
Britain will host further talks on reopening the vital Strait of Hormuz shipping lane with a coalition of countries next week. The meeting will continue the Government’s efforts to restore freedom of navigation in the Strait.
US vice president JD Vance is in Pakistan for peace talks with Iran, although a 21-hour session ended without a deal being reached in the early hours of Sunday morning.
Health Secretary Wes Streeting said it was “disappointing” there had not been a breakthrough in talks in Islamabad, Pakistan’s capital. On Sunday morning, he told Sky News: “It’s obviously disappointing that we haven’t yet seen a breakthrough in negotiations and an end to this war in Iran. That is a sustainable one. But as ever in diplomacy, you’re failing until you succeed.
“So while these talks may not have ended in success, that doesn’t mean there isn’t merit in continuing to try. And clearly, when you look at the impact of the war in Iran on this country, on other countries around the world who have no part in this war, it is in all of our interests for there to be a breakthrough and an end to this war.”
Elsewhere, Mr Streeting accused Mr Trump of saying some “incendiary, provocative, outrageous things on social media”. He said: “I think we’ve all come to learn that you judge President Trump through what he does, not just what he says. And ultimately, the only way in which we’re going to clear this situation up is to reach agreement with Iran, one that puts nuclear weapons beyond its ambitions and reach.”